If you’re running a startup, or working in one, you probably know how much work it takes to build a brand new product from scratch. It’s not unlikely that you’re reading this post by your desk at 10pm, just because you needed a break from your sweaty keyboard.
But no matter how much and how hard you work, it’s not enough. At least that’s what some experts claim.
Most humans are social creatures, and even though the tech world is built by developers (not famous for being super keen on networking), the startup industry arranges more networking events than most other industries.
In Barcelona you can go to several events every night if you have time.
Is hard work enough?
As I’ve worked as a journalist, meeting founders and entrepreneurs every week the last year, I’ve been asking several of them why I haven’t seen them at tech events before?
The answer is usually:
“We’re busy working, I don’t have time to attend events and drink beers several times every week.”
I went to cover a startup competition for a major European tech blog earlier this year. After tough competition between some of Spain’s best performing startups, one of them were crowned the winner. Me and my college were surprised that we hadn’t heard of the company before, and asked them how they went beneath our radar. The founders told us:
When I was bootstrapping through Tradesy’s first two years, I never attended events. Instead, I stayed focused (obsessed, really) on improving our product and technology. I was glued to the computer for 17 hours a day.
Building a network
It’s clear that networking is important, but it’s probably also true that many entrepreneurs would benefit more from working, than from sipping beer at tech events every other night.
To some people networking is the most natural thing to do, the ones that have the gift of speaking to anyone, anywhere about anything (or nothing). To them it’s like breathing.
For others it’s more about building a network, doing a job, rather than talking to a massive amount of people. And to some people, a small group, it’s torture.
But no matter what group you belong to, as long as your startup is being built, you’re the product. Before you have users, customers, a physical product, or any metrics at all, you and your team are the only thing representing your startup.
Connections are key, and good advice are extremely valuable, especially from people with experience from your own industry. But tech connections are not necessarily found through going to events.
It’s about being present, and especially talking to the right people. It does not have to be at tech events, but any place you can meet people caring about the product your startup is building.
Growing a solid network of people in your startup ecosystem can never go wrong, not to think about the vital support you can provide to other entrepreneurs building their respective upstarts.
But hard work is still as crucial as it always has been. Just because there is an event every night with great headliners and interesting topics, does not mean you have to attend.
Tech events are often a blast, and networking is good, but not for the sake of networking itself. Going to events will rarely create more value than a well-functioning team can accomplish in the same amount of time.
However building a network and providing value for your ecosystem is guaranteed to benefit both you and your startup. Just don’t do it on the expense of your startup.
For those of you that don’t know Olapic, is a startup that helps brands promote themselves with user-generated photos. Even though it’s not a registered Spanish company, the founders; Pau Sabria, Jose de Cabo and Luis Sanz, are all Spanish.
We sat down for a chat with Pau, which was quite relieved after the acquisition was final.
My co-founders and I are very excited about the next chapter for Olapic. It has been an amazing six years for us. At one point early on, we had a make-it-or-break-it moment, so to have come this far is quite satisfying.
Looking back, the three founders could not have chosen a better time to launch a user-generated photos startup.
We launched before Instagram even existed, so we really did not know what was in store for us. We were looking for a way to share photos after attending to a friend’s wedding. Fast-forward six years and we have shifted the way global marketing organizations are interacting with consumers and are influencing hundred of millions of transactions.
Not done with Olapic
None of the three founders are leaving Olapic after the acquistion.
We’re all staying on board to continue to build out the Olapic platform and to affect change in the marketing industry with the use of consumer-generated imagery. We are entering a new era of more authenticity in marketing and look forward to the next few years.
He explains that there has been many sleepless nights, long days, endless travel and tough choices in the last years, and expects more of the same in the years to come as well.
An entrepreneur’s work is never done!
In total Olapic has raised around $21 million in funding since launching.
Apart from working day and night with Olapic, Pau recently got engaged, and will spend a fair amount of time planning the wedding.
Keeping an eye on Spain
Olapic is based out of New York, but Pau is always keeping an eye open for Spanish startups.
It’s always interesting to see how the business environment is growing and evolving in Spain. My family is still there and all of my siblings are also entrepreneurs, it’s in our family blood, so I do like to know what’s happening.
He thinks the biggest difference between Spain and the US is the rapid pace.
Being based in New York, I can say there is an intensity and a deep drive to create new things at a rapid pace. As Spaniards with a broader worldview, being based here allowed us to expand rapidly into Europe and build a global business.
Pau is confident that Monotype will develop Olapic and help the company to expand even further in the future.
Monotype will be able to expose Olapic to creative agencies, creative directors and designers who are increasingly looking at how to include user-generated content as part of the design mix.
As someone said, startups years are just like dog years.
So, 3 years might feel to be 21: you definitely have to assimilate fast and time is precious if you want to test and validate ideas.
In 3 years we’ve been invested 2 times and we are preparing a new one.
We built a great product from scratch and it gets better every day!
We’ve found profitable targets and we are experiencing some exciting new ones!
We became relevant players and we built a blog that is already a reference.
We also failed many times but we’ve just learned to deal with it.
“Everyone can do business in Internet” — the biggest lie ever.
The only fact is that entrance barriers are very low, but in the end, like any business you need money. And if you really want to build something notorious, you need to do relevant stuff, and stuff consume resources.
“The more stuff you make, the more good stuff you’ll make.”
Every extra dollar allows you to grow. Return can be better or worst but the only truth is that with an extra dollar you will grow (at least) a little bit more. This seems something obvious, but is not.
Build your team
The most important thing is to build an A-Team.
I need people around, much better than me. Better in marketing, better in sales, better managers, more skilled. Assume fast is not just about dealing with daily issues, is to learn as fast as possible from fabulous people.
And this is not (just) about seniority. Is about filling the blanks in your company with some skills that someone in your team is able to deal with it better than no one else.
Oh, by the way, you have to build a C-Team as well!
Love (and manage) your team
Nowadays I definitely don’t DO anything: I just try to empower my team.
I tell people that I will do many things but at the end is the people of my team that make them happen.
I try to provide appropriate — both professional and emotional — conditions to allow my team work as better as possible given scarcity.
That’s why I spend most of the time looking for people that will make Quipu grow so as managing and motivating my current team. Making them proud and happy to work with us.
Because everything goes so fast, you have to be aware all the time where to put the focus on.
Time is scarce and you should focus on the REAL important things. I must avoid the “task-dealing” job.
At the end is all about guessing where to put the focus on
Your role changes every month and you should understand it, and act consequently.
You must assume that although you start doing every task into the company and you end up stop doing none of them.
Balance your emotions
People asks me, which is the most complicated thing you face? And definitely the most complicated thing is to balance my emotions.
You will face joy and disappointment: enjoy it.
Sometimes you’re the dog; sometimes you’re the hydrant. Try to balance it and always go ahead, there are lot of opportunities to reach.
For the last 3 years I’ve dedicated my whole life to Quipu and although some times is too much frenetic is worryingly addictive.
I’m Oriol Vila, I founded holaluz.com 5 years ago, I’m a Civil Engineer, I studied an executive MBA in 2009 and there is where I met my partners Carlota Pi and Ferran Nogué and decided to found the company.
Can you briefly give us the Holaluz pitch about what it does and how it differentiates itself from other utility companies out there?
Holaluz.com is a utility company, we sell energy. We know people don’t know about energy and even don’t care about energy and that’s okay, it’s not our goal to teach people about it but make things easier for them at a very fair price. Our product is a commodity and thus we can only differentiate from competitors on price or service. We actually have the lowest price and also a customer centered customer service, where we treat people as people and not just numbers (as our competitors tend to do). It is actually lots of little things that make our service better than the others: you can do everything from our website with a single click, we always send electronic invoices, our energy is 100% green (we treat all the stakeholders with the utmost respect).
At what point did you and your associates conclude the industry needed another player in the ring?
I think we realised we had to do something when Ferran’s mother received an 800€ invoice from the electric company. We tried to help her addressing the issue by contacting their customer service. They didn’t know what to do, they didn’t give clear answers, we had to repeat our story hundreds of times to different people and we realised that something that should be really easy was in fact very difficult. Parallelly, European Union’s laws were pushing all european governments to liberalize the energy sector so we decided it was a good moment to start something different.
Can you talk about the team dynamic between founders? What is everyone’s unique role, and where do your strengths compliment each other? Do you disagree often?
At the beginning we were just three, and we had 100 things to do so we split the work according to our abilities. We are three engineers who studied the same MBA, so in theory we would totally overlap, but our past work experience was different enough. Carlota has always been involved in the electric industry, so she managed everything around how to purchase and sell electricity, Ferran was more involved in the project management so he was more sales oriented and I took responsibility of the operations and the technical part of the project as well as the CEO title. At the beginning, when you are three, having a CEO doesn’t make a difference, but now that we are bigger I take the CEO role differently, Carlota took a PR role talking to the press, investors and so on and Ferran is working as the R&D leader and he also manages bank relations. We still talk the company strategy together though. We have the same vision of the market which is really good, but we sometimes disagree in small steps. After we discuss our disagreements we always end up with a better solution than any of our isolated ideas.
Considering you’ve only just raised your first financing round, how did you manage to make that first batch of money last so long?
We started with our own 300K€, each one of us managing to get the money from friends and family. From there, we took advantage of our specific sector, and for example we launched a prepaid option for some customers which helped our cash flow and financing our grow. We also came to an agreement with some providers that allowed us to sell their energy and paying them back a few days later. We can say that our cash flow strategy allowed us to last 5 years without any round of investment. We could keep growing at the same pace without any investment but we think now is the time to speed up our growth.
What is your customer acquisition strategy?
For small and medium businesses, we have an offline channel where we sell directly to SME, just to have the feeling of the market directly. Our offline sales team has two or three people. We also use external channels that already have a portfolio of customers and they want to sell something else. We provide them with a product on electricity and it works quite well. It’s 100% variable so the more the customer consume the more the channel receives.
We also have the online channel where we use AdWords and all the online strategies available trying to acquire customers and leads converting them online or through a phone call. Our acquisition cost is more or less 6–9 months of the customer life time value. Our churn is below 5% so we estimate a customer can be with us for an average of 7–9 years.
When you started you were online only, right?
When we began we wanted to be 100% online. Then we realized we wanted to reach companies, not only retails, and when your electricity expenses are around 10K a year, you expect more than just the online advantages. Regular customers are acquired mostly online but because contracting is not as easy as we would like (customers have to provide info on the KW contracted, yearly consumption, 20 digit numbers) we have to help some of them on the phone to ensure conversion.
We know you’ve been fundraising for a while now. The process can be very long. Can you share with us how you set about seducing your investors?
A friend of mine once told me that “as an entrepreneur you must be always looking for money because you never know when you are going to need it”. As exaggerated as it might sound what I take from it is that “once you know you need the money the work has to be done in advance, otherwise you won’t have time to raise it”. With more or less effort and resources I would say we have been in touch with investors since the first day. We had the opportunity to close a couple of deals during these 5 years but we decided we could keep going on our own. We are now in a really comfortable situation for fast growing and we felt ready for an investment that could help us with it.
And how did you finally settle on Axon Partners as investors?
We know a lot about our businesses and vision whereas investors are more keen on the financial aspects, and that’s why we contacted Creainversión last summer, an M&A boutique to help us with the process. They have a huge network and also having someone who perfectly understands both sides of the story as a mediator helps you talk the same language investors do. We spoke to 20 to 30 investors before meeting Axon Partners. We really liked them, which is something I think it’s mandatory when you are talking with a financial investor. We had a similar vision about the future and we decided to close the deal.
Now that you’re a big company, how do you manage to keep a fresh attitude? Tell us about your company culture* — what’s it like working at Holaluz?
We want to deliver the company values to the customer. If the people don’t feel our values, our customers definitely won’t. We like to treat our people the same way we would like to be treated. We need people who feel comfortable in an environment where there’s always something to do. We cannot compete with Google on salaries, but we make sure our employee feel we value their work. If you want to get told what to do every day, don’t work for a startup.
Where do you see Holaluz two or three years from now?
We currently have 60k customers. During the next 2 years, we have to multiply that figure by 3 or 4. The problem we are facing right now is that people don’t know the brand because we are too small. Now, only about 10% of the people will know Holaluz. If you are a mass market product you need to be known, and that costs money. We are using electricity as our main product line to acquire new customers, but what we really want to do is to manage anything related to energy for our customers such as gas, solar panels, electric vehicle, domestic batteries…
What kind of advice would you give to other entrepreneurs who plan to compete with the big players of their industries (eg. big utility companies)?
First, if you see the opportunity, believe in it. You need to convince more people, if you are the only believer, maybe you are crazy. So you need to find someone else who believes in the idea.
Quote: “Those who say it is impossible shouldn’t stop those who are doing it”